His eight minute interview on RTE's Morning Ireland was the first substantive discussion of how this loan would work and we have the transcript below.

As the Irish government continues to deny, Canute-like, that it is getting a bail out from the IMF, Honohan told Rachel English the loan would be big enough to demonstrate Ireland had "sufficient fire power to deal with the concerns of the market".

He said it would act as a "buffer" and would be made available to calm the international markets.

He was also asked what the interest rate of the loan would be and to respond to a report in today's Financial Times about alleged concern of a deposit levels dwindling in three key Irish banks.

Here is a transcript of the interview:

Is a loan on its way to bail out the Irish banks

If it's agreed, of course yes... The expectation is that negotiations will be effective and a loan will be made available and drawn down as necessary.

The ECB would not send large teams if they didn't believe first of all that this was someting they could agree to a package, that there is a programme that is fully acceptable to them that could be designed and that is likely to be accept to irish government and Irish people.

So it is your understanding that there will be a loan ?

It's my expectation that will happen, yes … absolutely.

How much will that loan be?

It will be a large loan because the purpose of the amount to be advanced or to be made available to be borrowed is to show Ireland has sufficient fire power to deal with any concerns of the markets, so it will be substantial for sure.

When you say tens of millions how much wll that be, €60bn to €70bn mabe?

Tens of billions, yes. I don't know that any precision has been put on it yet.

And what will happen that money, will it all be going into the banks?

I don't think there's any question of it all going into the banks … It's true that the banks need additional confidence … these huge sums of money that have been put in by the government to support the banks have not generated sufficient confidence yet.

The money is enough objectively but if the confidence isn't there, and partly not here because investors are concerned about the government finances and the future prospects for growth and employment.

With the market uncertainty generally high for the last four or five months, effectively since the end of April, I think it is desirable that the government should have more capital, government capital ownership funds availale to show to the market – 'look, this is beyond question'.

How much will they need in your assessment?

That's actually one of the specific questions that technical work is going on at the moment, and there are different views.

I think maybe the best way to look at this is is that this is contingent funding. The capital is probably not required at all, but it can be made available in the form of contingent capital funding that can be shown but not used.

Are we now talking about a larger figure than that given by the government in September on the so-called Black Thursday?

Not really if you're talking about net losses and what the overall ultimate cost to the taxpayer will be. This is money that is supposed to go in as capital, in other words something that goes in as a buffer and comes out again when it's not needed.

The Americans did this in the autumn of 2008, they told all their banks, look 'we know you thnk you don't need capital', but we think the market thinks you need capital so you have got to accept additional capital. A lot of investment was made by the American government into their banks and it was repaid very promptly in that case.

The FT is reporting there is concern about bank deposits here dwindling

Well, first of all I'm not going to talk about any banks, as you know I'm not meant to talk about specific banks.

There have been substantial outflows from the Irish banking system since April. That's a matter of general knowledge and what's happened is that very large investment firms, investment funds, financial institutions, largely abroad, invested and placed deposits in banks in good times as the ratings of the country fell then said well we don't, as a matter of course, invest in less than triple-A and so forth … and so they just didn't renew their deposits as they fell due.

But that was all replaced by borrowing from the European Central Bank facility that is available to all the banks. So that's what's been going on.

Is that situation continuing?

There has been a steady of drain of deposits, but as I say, this is something for which the banks have facilities and I, from the Irish central bank, I'm in a position to provide exceptional funding if it's needed.

That was needed?

All I'll say is there has been such a need, but I don't want you to press me on these things, because I'm not allowed to talk about these things.

I'd have to make sure, just in case I sound as if I'm exceeding my powers, I would have to make sure that the other members of the ECB, the governors don't object to making these loans because that's always on a case by case basis. Of course if I ask them, they would not object.

Talking of technical matters, on the question of this loan, how and when will it be decided what rate of interest Ireland will be charged?

Yeah, that's a curious thing. We know very, very clearly the IMF's procedures for the rate of interst on their lending, and you can talk to someone else on thatbecause I'll get it wrong and I'm standing here in Frankfurt.

The EFSF and the EFSM, theses European faclities' exact rate of interest hasn't as yet been agreed, but in broad terms, it's expected to be roughly in the same territory as the IMF standard lending interest rates.

Is that likely to be around five%?

In broad terms, it's in that territory, but some of the lending is in the form of FDRs, some of it will be in the form of euros, so it gets a little bit complicated.

Just to confirm it is your understanding that we will be receiving a multibilion loan from the IMF and the EU?

It's not my call. It's the government's decision at the end. It's my expectation that this is definteily likely to happen. That's why the large technical teams are sitting down discussing these mattes and I think this is the way forward. Market conditions have not allowed us to go ahead without seeking the support of our international collaborators and I think that is what's ahead and I don't see it as something really worrisome or should lead to a huge change in direction because as we know the fiscal discussions about €6bn in cuts, all of that is part and parcel of what an IMF team would ask for, would suggest if they came in in the absence of any such discussions.

I'm not saying they will rubber stamp it. I think they will not find all that much to disagree with.